Insteel Industries Inc (IIIN)
Days of sales outstanding (DSO)
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 10.24 | 10.13 | 8.70 | 8.78 | 10.04 | |
| DSO | days | 35.66 | 36.04 | 41.97 | 41.56 | 36.36 |
September 30, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 10.24
= 35.66
To analyze Insteel Industries, Inc.'s days of sales outstanding (DSO), we compare the DSO over the past five years. DSO measures the average number of days it takes for the company to collect revenue after a sale is made. A lower DSO indicates that the company takes less time to collect its receivables, which is generally favorable.
In 2023, the DSO decreased to 35.66 days from 36.04 days in 2022, indicating an improvement in the collection of receivables. This decrease may suggest the company's efforts to streamline its credit and collection processes or the adoption of more efficient sales and invoicing practices.
Comparing 2023 to 2019, the DSO has improved substantially, as it was 36.36 days in 2019. This improvement demonstrates the company's effectiveness in managing its accounts receivable, which may positively impact its liquidity and cash flow.
Overall, the decreasing trend in DSO over the past five years suggests that Insteel Industries, Inc. has been successful in more efficiently converting its credit sales into cash, which is a positive indicator of its financial management and customer credit policies.
Peer comparison
Sep 30, 2023